USA tax on UK rental income
Feb 20th 2019, 4:27 pm
#16
BE Forum Addict
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,131
Re: USA tax on UK rental income
I just heard from friends back home that the largish Polish and Romanian population appears to have declined considerably. Most of the houses were rented to low paid laborer type people. They were HMOs, housing about 10 people in a 3 bed house. This was in the home counties where rental prices are quite high. I agree is is a very narrow scope, I'm sure there are other places where this is not happening.
It looks like there may be a glut of empty rental homes, this may explain the decline in rents. Maybe it's just a coincidence.
https://www.theguardian.com/money/20...me-in-a-decade
It looks like there may be a glut of empty rental homes, this may explain the decline in rents. Maybe it's just a coincidence.
https://www.theguardian.com/money/20...me-in-a-decade
Thanks for the link. Looks promising for those wanting to rent.
Feb 22nd 2019, 6:20 pm
#17
Just Joined
Joined: Dec 2012
Posts: 17
Re: USA tax on UK rental income
Hi,
It is entirely possible to make a 'loss' for rental income that reduces your tax liability in the US.
Cheers,
Peter
It is entirely possible to make a 'loss' for rental income that reduces your tax liability in the US.
Cheers,
Peter
Feb 22nd 2019, 6:22 pm
#18
Just Joined
Joined: Dec 2012
Posts: 17
Re: USA tax on UK rental income
Pulaski and Durham laddie both spot on - I can concur from my own experience.
Feb 22nd 2019, 7:12 pm
#19
Lost in BE Cyberspace
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,425
Re: USA tax on UK rental income
Rental activities are considered "passive" activities, and a loss on a passive activity is not deductible against non-passive income, such as wages. A special rule lets you deduct up to $25,000 of losses from rental real estate in which you actively participate. The $25,000 deduction is phased out when your modified adjusted gross income is from $100,000 to $150,000, resulting in no deduction above $150,000 (for a married filing joint return). See IRS Publication 925 for additional information.
Feb 22nd 2019, 8:20 pm
#20
Just Joined
Joined: Dec 2012
Posts: 17
Re: USA tax on UK rental income
good point BUT
"Active participation. Active participation isn’t the same as material participation (defined later). Active participation is a less stringent standard than material participation. For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions."
I am sure some folks take part in these decisions
"Active participation. Active participation isn’t the same as material participation (defined later). Active participation is a less stringent standard than material participation. For example, you may be treated as actively participating if you make management decisions in a significant and bona fide sense. Management decisions that count as active participation include approving new tenants, deciding on rental terms, approving expenditures, and similar decisions."
I am sure some folks take part in these decisions
Feb 28th 2019, 5:06 am
#21
Lost in BE Cyberspace
Joined: Jul 2008
Location: Portlandia Metro
Posts: 7,425
Re: USA tax on UK rental income
Just been doing my taxes, this is the reasons for not being able to claim a loss as stated by turbotax
Rentals are considered passive activities for most owners. There are rules that apply to passive activities that limit the losses you can take on your tax return. Here are a few reasons why your losses may not be fully deductible:
* You do not actively manage your rental so losses are only allowed if there are profits from other passive activities.
* You do actively manage your rental so $25,000 in losses are allowed if your income is $100,000 or less.
* Your income is over $150,000. None of your real estate loss is allowed.
* Your income is over $100,000 and less then $150,000. Some of your loss is allowed and some of your loss is carried over to the future.
* You are filing Married Filing Separately (MFS) and you live with your spouse during the year. This reduces allowable losses to zero.
* You are filing Married Filing Separately (MFS) and you live apart from your spouse the entire year. Your allowable losses are reduced by 50% to $12,500
Rentals are considered passive activities for most owners. There are rules that apply to passive activities that limit the losses you can take on your tax return. Here are a few reasons why your losses may not be fully deductible:
* You do not actively manage your rental so losses are only allowed if there are profits from other passive activities.
* You do actively manage your rental so $25,000 in losses are allowed if your income is $100,000 or less.
* Your income is over $150,000. None of your real estate loss is allowed.
* Your income is over $100,000 and less then $150,000. Some of your loss is allowed and some of your loss is carried over to the future.
* You are filing Married Filing Separately (MFS) and you live with your spouse during the year. This reduces allowable losses to zero.
* You are filing Married Filing Separately (MFS) and you live apart from your spouse the entire year. Your allowable losses are reduced by 50% to $12,500
